Characteristics of a Charitable Organisation
- Formal: A charitable organisation should be institutionalized and registered, and should have well defined program objectives as well as rules and regulations of governance.
- Private: It is important that a charitable organisation be institutionally separate from the Government.
- Self-governing: A charitable organisation is usually managed by ‘Board of Trustees’ or ‘Governing Council’ and not controlled from the outside. Key participants in the management of a charitable organisation are supposed to act in fiduciary capacity.
- Not for profit: A charitable organisation cannot distribute profits. It can earn and retain a profit, which is referred to as surplus.
- Voluntary: 8 Some meaningful voluntary participation in the activities and management of the organization is important for an organization to be classified as charitable organisation.
- Non-religious: A charitable organisation should not be involved in promoting religious worship or religious education. However, pure service oriented organizations affiliated to religious organizations can be covered.
- Non-political: A charitable organisation cannot be affiliated to any political party.
- Works for public benefit: A charitable organisation should not serve private cause and public element for its activities is very important.
Important Points to Remember
There are Alternative names used for referring to Charities in India
NPO – Not for Profit OrganisationNGO – Non-governmental organizationVO – Voluntary organizationCSO – Civil society organizationCBO – Community based organizationCharitable organizationTSO – Third sector organization
However, whatever the term used to describe a charitable organization, a few important points must be remembered with regard to the charity sector: There is no single piece of legislation, which comprehensively governs the sector and similarly no single regulator exists in India, in contrast to other countries where a Charity Commissioner regulates the individual organizations on nationwide basis. Charities can be formed in multiple ways and may be subject to various acts of legislation. It is the choice of the persons forming the charity to decide which form to take. Different legal provisions exist at the national and state level. Some states in India have enacted their own law to govern certain forms of charities. Nonprofit organizations are not permitted to be involved in any ‘political activity’. Bombay Public Trusts Act even puts ‘political education’ outside the scope of ‘charitable purpose’. However Section 20 of the Societies Registration Act, 1860 allows registration of a society whose object may be ‘diffusion of political education’. India, being a secular state, does not allow distinction of caste, colour and creed in formation of a charity. However, it is possible to create a valid trust for the benefit of a particular section of the community. Although, this kind of trust would not enjoy income tax exemption. Religious trusts established for the benefit of a particular religious community are also not exempt from income tax.
Forms of Activities of Charity
Non-profit organizations in India today encompass a wide-range of activities, including designing and implementing innovative programs in various sectors of development, research, documentation, and training and advocacy. They range from very small people’s organizations to highly sophisticated and technologically advanced research and health care or educational institutions. Some form of activities of charitable organizations include: Recommended Articles
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Author – Dr. Rajkumar Adukia If you have any suggestion regarding “Characteristics of a Charitable Organisation” then please tell us via below comment box….
